Amended by Promotion of Renewable Energy Act no. 1392 of 27 December 2008 entering into force on 1 January 2009

Renewable Energy Description:

Replacement scheme for wind turbines on land provides possibility to receive scrapping sertificate and thus financial support for replacing old and inappropriately situated wind turbines with new and more efficient turbines. Financial support is distributed in the form of an extra price supplement.

The background for the scrapping system is embodied in the Energy Policy Agreement of 29 March 2004 between the Liberal Party, the Conservative Peoples Party, the Social Democrats, the Socialist Peoples Party, the Social Liberals and the Christian Democrats regarding wind energy and decentralised co-generation plants.

According to the agreement, a scrapping system has been introduced so that wind power is expanded while older, inconveniently positioned wind turbines are decommissioned. According to the system, an extra surcharge is paid to new, onshore wind-turbines on the condition that the owner is in possession of a scrapping certificate for a wind turbine with installed power of 450 kW or less which was decommissioned between 15 December 2004 and 15 December 2010. The surcharge is paid to factory-new wind turbines connected to the grid between 1 January 2005 and 31 December 2010.

As a consequence of the energy policy agreement of 21 February 2008 between Denmarks Liberal Party, the Conservative Peoples Party, the Social Democratic Party, the Socialist People's Party, the Social Liberal Party and New Alliance (now Liberal Alliance) on Danish energy policy for the years 2008-2011, the scrapping scheme was prolonged so that scrapping certificates can still be earned until 15 December 2010 for new wind turbines grid connected before 31 December 2010.

Changes have been enacted in the Promotion of Renewable Energy Act.

The price supplement is DKK 0.12 per kWh and is granted for electricity production corresponding to 12,000 full-load hours for double the installed capacity of the decommissioned wind turbine. However, if the total amount of this price supplement of DKK 0.12 per kWh, the market price and the ordinary price supplement of DKK 0.10 per kWh exceeds DKK 0.48 per kWh, the price supplement of DKK 0.12 per kWh will be reduced.

The energy policy agreement of 21 February 2008 moreover means that wind turbines connected to the grid on 21 February 2008 or later are granted an extra price supplement of DKK 0.08 per kWh for electricity production corresponding to 12,000 full-load hours for double the amount of the installed capacity of the decommissioned wind turbine. The price supplement is fixed so that it is granted irrespective of the spot market price.

Owners of wind turbines grid connected from 21 February 2008 until and including 31 December 2010 may, instead of the price supplement of DKK 0.08 per kWh, choose to receive a price supplement of DKK 0.12 per kWh, provided the sum of the price supplement and the spot market price on a monthly basis do not exceed a limit of DKK 0.38 per kWh.

The scrapping certificates are issued by the system operator, Energinet.dk. Scrapping certificates may only be issued within a pool which corresponds to a total capacity of decommissioned wind turbines of 175MW.

The system operator will publish a list regularly of the number of certificates which have been issued and the number of advance commitments which have been given.